Last night, Greentech Media, Solar One and NYC ACRE hosted this year's first Clean Energy Connections event in the 2014 series, The Expansion of Distributed PV in the Age of the Grid Edge, live from the Jerome L. Greene Performance Space in New York City.
The theme of this year’s series is the grid edge, which GTM views as the setting for the potential transformation of the electric grid. Last night's discussion was aboutsolar distributed generation, and its impact on the grid.
Rick Thompson, Greentech Media founder and President, set the stage with some background on the concept of the "grid edge," a term coined by the GTM Research team. The grid edge is the zone of the grid most impacted by increased rooftop solar and distributed generation -- and the "two-way flows" of power mentioned by ConEd's Margarett Jolly. Thompson spoke of the increased dynamism on the grid edge caused by distributed generation, the inherent intermittency and unpredictability of PV, the need for resiliency in the face of emergencies, and an available energy-centric IT set, as well as the changing nature of the electric utility. (True grid modernization is happening at the edge of the grid, and we're the first to cover it in depth. Join us at Grid Edge Live to be a part of the transformation.)
The grid edge cube presented by Thompson (with a nod to the seven-layer OSI stack) is a detailed model of the system that divides into a utility-facing side, a customer-facing side, and a set of applications and new business models riding on top.
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Each of the evening's panelists had a different view about the changing nature of the utility in the face of PV and DG.
Ben Kellison, smart grid senior analyst for GTM Research, moderated the panel, and he was joined by Margarett Jolly, Director of Research & Development at Consolidated Edison; Shaun Chapman, Director of Policy and Electricity at SolarCity; Stacey Hughes, Chief Marketing Officer at Sunlight General Capital; and Naimish Patel, CEO of Gridco Systems.
Grid edge opportunities and challenges
GTM's Kellison asked the speakers to share what excited them and what concerned them about the grid transition that is currently underway.
As an engineer, ConEd's Jolly said she is excited about two-way flows on the grid and determining how best to manage them. But she was concerned that the "technology can't keep up with two-way flows."
SolarCity's Shaun Chapman said he was concerned about climate change, but excited about the chance to innovate our way out of it. Complaints, he said, could be directed to his twitter handle @sunrun (which might be flooded, given the evening's lively performance by Chapman).
Stacey Hughes of Sunlight General Capital said that she is excited about just how much capital there really is available for solar and DG projects. Her concern is that investors want to know what they're getting with DG projects, and regulatory shifts don't fit with twenty-year project finance predictability horizons.
Naimish Patel at Gridco, a startup developing hardware and software to improve grid resiliency and reliability, is excited about "the continually improving economics" and "innovations in financing mechanisms" that create a clear path to grid parity for distributed generation. He also suggested that after 100 years, we are finally seeing the emergence of a "different use case" for the grid -- customers are becoming suppliers. Patel's concern is maintaining the grid with its new two-way power flow, as well as the economic implications for all grid customers as more customers begin to self-generate and go off-grid.
Hughes of Sunlight General Capital noted that what gets "investors to part with their money" are not the big questions of grid transformation, but rather the "relatively safe" nature of solar investments. She said investors are "still waiting to see what happens" in this "nascent industry" before really jumping in. She said that unfortunately, "every commercial sale has its own credit quality," which is why her firm restricted its business to municipal projects like schools and other public-private projects.
Two-way power flow and energy storage
Gridco's Patel noted that for the last century or so, electrical distribution engineering design rules have been based on the assumption that power flows in only one direction. In striving to keep voltage within the ANSI range, Patel suggested that design rules have to change in this new era of two-way power flow.
Patel noted that voltage spikes from solar or distributed generation can be mitigated by making conductors thicker, or, in the same vein, by increasing the size of transformers. Active elements such as capacitor banks can also be engaged. The problem is that reconductoring is expensive, as is replacing transformers. Mechanical solutions like capacitor banks and voltage regulators "are simply not able to keep up."
What's needed, said Patel, is a way to regulate voltage on the distribution line within the ANSI range without moving parts. (Coincidentally, that's exactly what Gridco does.)
Patel spoke of the utility death spiral scenario: as increasing numbers of customers invest in DG and consume fewer kilowatt-hours, the burden of the cost goes to those who are not adopting DG. He said, "Even if the amount of kilowatt-hours changes, the grid is still needed and still costs the same." He pointed out the lack of sustainability of a situation where non-adopters are subsidizing DG adopters, with costs being socialized "in the wrong direction."
Storage will help, said Patel, but the challenge with any storage technology is that batteries and the like "don't benefit from a Moore's law" type reduction in cost and efficiency. Instead, cost reduction comes only from increases in volume, and thus it becomes a "bootstrap problem." SolarCity's Chapman suggested that there might be a potential battery partner for SolarCity that could help make energy storage economically viable. Patel said it will still be "some time" before storage gets "deployed deeper in the grid." He noted that it made sense from a higher level, and he expressed his hope that the "unnamed company" could "drive the learning curve."
Grid modernization is happening at the edge of the grid, and GTM is the first to cover it in depth. Join us at Grid Edge Live to learn more and be a part of it.
Rick Thompson defines the grid edge here: